Oil prices fell in early trading on Thursday, 29 October, giving back part of the previous day's gains as traders weighed hopes for diplomacy against fears of disruption to Middle East supplies. Brent crude futures fell 82 cents, or 0.7%, to $114.50 a barrel by 0132 GMT, Reuters reported, while US West Texas Intermediate crude fell $1.04, or 1.0%, to $101.74. The move followed rises on Wednesday, when Brent gained 1.3% and WTI gained 3%.

Why traders pulled back

A Nomura Securities economist, Yuki Takashima, was quoted by Reuters as saying selling pressure was prevailing amid expectations that peace talks may resume, while adding that the decline remained limited. Reuters reported that US Vice President JD Vance had sought to revive negotiations by sending a letter to Iranian Security Council chief Mohsen Rezaei, citing a Wall Street Journal report based on US officials and people familiar with the matter. That report of an outreach is not, by itself, evidence that talks have restarted or that any deal has been agreed.

Conflict risks keep a floor under prices

At the same time, the market had clear reasons not to fall further. Reuters reported that the Saudi-led coalition said it had destroyed a ballistic missile fired by Yemen's Houthis towards the kingdom's eastern region early on Thursday, and that Yemeni government forces said the Houthis had attacked Aden airport on Wednesday. That followed a Houthi claim to have hit Saudi Arabia's biggest oil refinery, a claim Saudi authorities did not immediately confirm, according to Reuters.

Stocks draw adds support

Separately, the US Energy Information Administration said crude stocks fell by 1.9 million barrels in the week ended 23 October, against analysts' expectation in a Reuters poll of a 15,000-barrel build.

Sources: Reuters, Shafaqna English (citing Reuters).